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Connex and EBRD Pioneer the Romanian Telecom MarketThe demand for telephone services in Romania has been overwhelming since the country started moving toward political and economic liberalization. Even as late as 1997, the average waiting time for a fixed phone line in Bucharest was four years. But then along came Connex. Connex is the registered trademark of MobiFon S.A., the company that launched the first Global System for Mobile Communications (GSM) network in Romania. It is controlled by ClearWave N.V., a subsidiary of Montreal-based Telesystem International Wireless Inc. (TIW), a major cellular operator in Central and Eastern Europe with more than 3.7 million subscribers. Backed by US$190 million financing from the European Bank for Reconstruction and Development (EBRD), Connex-MobiFon introduced Romania's first nation-wide GSM network in 1997. The loan was expanded in 1999 by four parallel debt facilities totalling US$105 million from EBRD, the Nordic Investment Bank, ABN AMRO and Export Development Canada (EDC). With approximately 2.5 million GSM customers and a network covering 97 percent of the Romanian population, Connex is now the preeminent provider of telephone services in what is fast becoming one of Eastern Europe's most connected societies. Staying ahead of the wave Looking forward, Connex knew that in order to maintain its dominant position in the Romanian market, it had to broaden its portfolio of services and prepare for the next generation of technologies. Diversification came with the introduction of mobile services and dial-up Internet connectivity—the demand for which, like voice, had long gone unaddressed due to the lack of landlines. Connex subsequently began to offer a full range of communications solutions from voice and data services to mobile Internet through myX, the first mobile portal in Romania. Most recently, Connex launched NetZone, a broadband Internet access service that enables users to wirelessly access the Internet at speeds of up to 11 Mbps. This spectacular growth has led to the company becoming the country's largest Internet service provider (ISP) in addition to the leader in the domestic mobile telecommunications market. "Connex customers benefit directly from its mission to empower Romanians to connect more easily to the world," says Ted Lattimore, President and Chief Operating Officer of Connex. EBRD and Romania: A long-term relationship In August, 2002, MobiFon closed another senior loan facility led and arranged by EBRD, this time for US$300 million. Backed by EDC and a number of international commercial banks, it was the largest private-sector loan in Romania since reforms began in the early 1990s. "The move from project financing to a corporate loan reflects the strong financial performance of MobiFon in recent years," says James Jackson, Chief Financial Officer of ClearWave. "The new facility provides MobiFon with greater financial flexibility to use its free cash flow." EBRD has been actively involved in the Romanian telecom sector since the early 1990s. "The success of this syndication illustrates the growing confidence that lenders have in providing long-term financing to well-managed, strong companies in the Romanian private sector," says EBRD's First Vice President, Noreen Doyle. "In EBRD's view, developing the telecom network is a vital condition for attracting more foreign companies to do business in Romania." According to Lattimore, working with EBRD has been rewarding "as they share our spirit of investing in the development of Romania and its people." Transforming the communication landscape Connex, which has grown to 1,600 employees within five years of its founding, boasts dozens of "firsts" in Romania and the region on various fronts, besides being the first GSM operator and the first company to offer dial-up Internet services. These include being the first to launch short messaging service; to offer mobile data and fax services; to use ecological equipment working on wind energy; to install GSM equipment on unreachable peaks using helicopters; and to donate mobile phones for the medical emergency services. The company also pioneered the WWN (World Wide Number) service in Europe and the local version, Easy Dial, in Romania. WWN enables mobile phone users to dial the first letters of the name of the company they want to reach if they have forgotten or do not know the correct number. Connex is the only wireless communication operator in the world to launch its services after only 135 days from being granted an operating licence, and to be named "Most Successful Company in Romania" by the Business Central Europe magazine, three years in a row. For more information, contact: Export Financing Division, DFAIT Ted Lattimore, President and COO Mark Boutet, Vice President, Communications Publication date: 2002/12/02 |
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